Assets, Services and the
Community Rights
Anton Schultz
Development Manager
Locality
Localism Act
• Intended to devolve power from central
government to individuals, communities
and local councils
• Increased power and autonomy for Local
Authorities
• Specific powers / rights for communities
New Community Rights
BUILD
NEIGHBOURHOOD
PLANNING
BID
CHALLENGE
Community Right to Build
BUILD
small scale, site-specific developments
without planning permission
WHY COMMUNITY ASSETS?
Generate Local Wealth
Pride in Place
The character of a place is found in the
distinctive qualities of its landscape,
cultures, and built environment.
Communities taking
responsibility - empowerment
Profitability and earned income in community sector
organisations categorised by those without an asset
100%
80%
60%
Profit Margin
40%
20%
With Asset
No Asset
0%
0%
10%
20%
30%
40%
50%
-20%
-40%
-60%
-80%
Earned Income
60%
70%
80%
90%
100%
Profitability and earned income of community sector
organisations categorised by those with an asset
This shows that
community trusts
with an asset tend
either to have
margins of 10% to
40% or significant
losses whilst
earned income is
typically around
20%plus
100%
80%
60%
Profit Margin
40%
20%
With Asset
No Asset
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
This diagram also
illustrates the
higher risk
associated with
owning and
managing an asset
-20%
-40%
-60%
-80%
Earned Income
Base for Local Service Provision
New Partnerships
The Cost of Doing Nothing?
BID
Right to Bid (Assets of Community Value)
“aims to ensure that buildings and
amenities can be kept in public use and
remain an integral part of community life”
BID
Assets of Community Value
BID
List of assets of community value
The Pub?
The Post Office?
The Village Hall?
The Corner Shop?
The School?
The Allotments?
BID
Assembling an assets list
• LAs to list assets of ‘community
value’
• Public, private, and VCS owned
• Nominated by Parish Council,
community council, or a locally
connected voluntary or
community body
• LA must inform owner and
nominee
• Right of appeal for landowner
• 5 year listing
The Pub?
The Post Office?
The Village Hall?
The Corner Shop?
The School?
The Allotments?
BID
What is Community Value?
Must further the social well-being or
cultural, recreational or sporting
interests of the local community
This must be its principal use
558 Assets Listed as of October 2013


BID
Moratorium Period
• Triggered when owner wants to sell
• Prevents owner concluding sale
• 6 weeks for community group to notify LA they
wish to bid
• 6 months to raise capital to purchase
• Followed by a protected period
– 18 months: to protect owner from
repeated attempts to block sale
Asset Transfer
• Transfer of management / ownership from public body
to communities
• General Disposal Consent 2003. Permits local
authorities to transfer land at less than its market
value provided that:
– it is likely to contribute to the “promotion or
improvement” of the economic, social, or
environmental well-being of the area; and
– the difference between the market value and the
actual price paid for the disposal is not more than
£2,000,000.
Right to Bid and Asset Transfer
Right to Bid
Asset Transfer
Basis
Statutory
Policy encouragement
Type of asset
Community value
Any publicly owned asset
Ownership
Any owner
Public sector
Process
Defined in Localism Act
By negotiation
Value
Market value
Usually at an undervalue
Terms
Must be freehold or lease of By negotiation
25+ years
Mechanisms are not mutually exclusive
Drivers for Change

Local Authority Asset Rationalisation
 Treasury have been calling for 20% reduction in public asset ownership
by 2020
 Revenue Savings for LA (consolidating into cheaper efficient
accommodation)
 Service Synergy / Collocation
 Flexible and Mobile working

More diverse supplier base
Community Asset Acquisition
•
•
•
•
•
•
Management arrangements
Meanwhile Space
Short term lease transfer
Long term lease transfer
Freehold transfer
Freehold purchase
Increasing:
Autonomy
Risk
Impact
Opportunity
Capacity required
Balance sheet
Be sure about your responsibilities
•
•
•
•
•
•
•
•
Insurance
Repair and maintenance
Decoration
Alterations
Owner’s costs and rights;
Reviews; break-clauses?
Sub leasing
Covenants and use restrictions
BID
Funding for Asset Acquisition
• Social Investment Business
www.sibgroup.org.uk
(Community Ownership & Management of Assets programme)
• Pre-feasibility grants of £5k to £10k
• Feasibility grants of £10k to £100k
• Capacity building, training, expertise, business
planning, viability testing, market research…
Useful asset resources
• To Have and to Hold: guide to long-term
community ownership and development of land
and buildings (from www.locality.org.uk)
• www.buildingcalculator.org.uk: helps assess
the future costs of the building you own or are
considering taking on – including its repair,
maintenance and other operating requirements.
• www.localitybrokers.org.uk:partners property
professionals with aspirational community
enterprises to transform land and buildings for
local benefit.
SERVICES – THE RIGHT TO
CHALLENGE
Community Right to Challenge
CHALLENGE
challenge and take over a council
service they think can be better run
CHALLENGE
Who can use the Right to Challenge?
•
•
•
•
voluntary and community bodies
charities
parish and town councils
2 or more employees of the Local
Authority involved in that service
- these are called ‘relevant bodies’
CHALLENGE
Which authorities can be challenged?
• local authorities
– County councils
– District councils
– London borough councils
• certain fire and rescue authorities
- possibly others in the future
- these are called
‘relevant authorities’
CHALLENGE
How is the challenge made?
The relevant body submits an
expression of interest (EOI)
to the relevant authority
CHALLENGE
Which services does Challenge apply to?
All services provided by, or on behalf of,
a relevant authority are defined as
‘relevant services’
- unless they are expressly excluded!
CHALLENGE
The Challenge process
1.
2.
Local authority specifies how and when EOIs
can be submitted – otherwise submitted at anytime
Relevant body submits EOI.
- Must make a sound business case and show how
they could deliver or contribute to delivery of a
service, better
3.
Local authority accepts, rejects, or passes
back for amendment - can only pass back if they
would otherwise reject
4.
If accepted, pause before procurement starts
CHALLENGE
Why can a Challenge be rejected?
Service reasons
– services for vulnerable people with highly complex needs
– services jointly commissioned with the NHS
– plans would lead to breach of statutory duty or law
Transformation reasons - Decision already made to
– cease providing the service
– contract out the service
– negotiate a spin-out with staff
– must be a formal,
documented decision
CHALLENGE
Why can a Challenge be rejected?
Subjective reasons
– EOI is “frivolous or vexatious”
– Relevant body lacks the capacity (inc consortia member)
– Detail of plans are “inadequate or inaccurate”
• 22 Expressions of Interest Submitted at Oct 2013
• One accepted
CHALLENGE
Opportunities
•
•
•
•
Encourages ‘local thinking’
Co-design of services
Breaking down contract size
A catalyst for voluntary & community
sector collaboration
CHALLENGE
Funding for CRtChallenge
• Social Investment Business (Community Right to
Challenge programme)
• Pre-feasibility grants of £5k to £10k
• Feasibility grants of £10k to £100k
• can apply for 50% or 30% of contract costs
(depends if under or over £30k)
• intended for consortia building, training,
expertise, business planning, market research…
www.contractreadinesschecker.org.uk
• provides a quick overview of the
capability and potential of your
organisation highlighting the relative
strengths and weaknesses
www.locality.org.uk
www.mycommunityrights.co.uk
0845 458 8336
Anton.schultz@locality.org.uk
DISCUSSION
Comments and questions
• Your experiences of asset management /
public service delivery
• Current opportunities / considerations